Google is strengthening its position in its debut as Silicon Valley companies compete to create state-of-the-art artificial intelligence systems by investing more than $1 billion in OpenAI rival Anthropic. Four sources with knowledge of the matter claim that the Alphabet-owned search giant was boosting its investment in Anthropic after having already invested roughly $2 billion in the organization.
Google developed the technology that powers models like Claude and OpenAI's GPT4, but the company has fallen behind in marketing this powerful technology. As part of the Anthropic deal, the Silicon Valley corporation is trying to expand its AI business and compete with well-funded rivals like Microsoft, Meta, and Amazon.
Anthropic Company
Anthropic is a prominent start-up in the new generation of generative AI firms. It provides tools that produce code, graphics, and text in response to user input. It is famous for its Claude family of artificial brain models.
According to many people, Anthropic was also on the point of obtaining an additional $2 billion from Silicon Valley investment firm investors in a different deal that would triple the start-up's valuation to roughly $60 billion.
The start-up is fighting against Microsoft, Facebook parent company Meta, and competitors OpenAI and Elon Musk xAI, each of which produced over $10 billion last year. In the last 18 months, Amazon has announced its largest-ever start-up investment of $8 billion, which includes the latest round of funding from Google into Anthropic.
Federal Trade Commission
During Joe Biden's presidency, the Federal Trade Commission looked into the close connections between AI start-ups and their Big Tech investors.
Under retiring commissioner Lina Khan, the FTC examined the agreements' effects on competition in the growing industry. It focused on funding from Google and Amazon into Anthropic and Microsoft's collaboration with OpenAI. However, dealmakers are becoming more sure of their capacity to establish partnerships as Khan steps down in the upcoming weeks.
In December, Anthropic income reached an annualized $1 billion, which is around ten times higher than it was a year earlier.
However, investors do not believe Anthropic or its competitors will turn a profit anytime soon due to the high expenses involved in creating cutting-edge AI models. The technology has the potential to generate trillions of dollars in value in the future with further developments.